The state Legislature on Thursday approved a minimum wage hike to $15 an hour for all employers in California by 2023, sending the bill to Gov. Jerry Brown for his expected signature on Monday.
Both houses approved the wage-hike bill on largely partisan votes of 26-12 in the Senate and 48-26 in the Assembly. The votes came just three days after Brown and legislative and labor leaders unveiled the wage hike plan at a news conference at the state Capitol. The bill was triggered by a different measure to hike the wage more rapidly to $15 an hour that qualified for the November ballot. That measure will soon be pulled.
The bill would raise the minimum wage in increments, starting with a hike to $10.50 an hour on Jan. 1 for businesses with more than 25 employees. On Jan. 1, 2018, the wage would go to $11 an hour and then increase $1 each year until reaching $15 an hour by Jan. 1, 2022. Businesses with 25 employees or fewer would have an additional year to hit each minimum wage level; all businesses would be paying $15 an hour by Jan. 1, 2023.
After the wage reaches $15 an hour, there would be annual hikes pegged to the Cost of Living Index, with a cap of 3.5 percent for any single increase.
The bill would have little or no impact on the city of Los Angeles, unincorporated Los Angeles County and other cities in L.A. County – such as Santa Monica – that have their own minimum wage hike ordinances getting to $15 an hour more quickly. But it would supercede actions by cities that have passed wage-hike plans that don’t get to $15 an hour, such as Long Beach’s plan to raise the wage to $13 an hour by 2019. And most impacted would be the vast majority of the county’s 88 cities that simply follow the state minimum wage law.
In a nod to employer groups that have argued minimum-wage hikes fail to take economic conditions into account, the bill contains “off-ramps” to pause wage hikes if negative economic or budgetary conditions emerge. The governor can act by September 1 of each year to pause the next year’s wage increase for one year if there is a forecasted budget deficit of more than 1 percent of annual revenue or if statewide jobs or retail sales totals decline.
“This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change,” Brown said at the Monday news conference.
With Thursday’s votes, California is poised to become the first state to enact a minimum wage increase to $15 an hour. The national minimum wage rate is $7.25 an hour.
Reacting to Thursday’s votes, Assemblyman Chris Holden, D-Pasadena, said, “This is a major victory for families across the state struggling to make ends meet. With the gridlock in the nation’s Capital, California has once again shown it can lead.”
But California Consumers Against Higher Prices, a coalition of business groups, including the California Chamber of Commerce and the California Restaurant Association, issued a statement expressing disappointment in the votes.
“We are disappointed in the Legislature for disregarding their constituents, districts, small business and working families by approving this overreaching minimum wage increase,” the statement reads. “A proposal of this magnitude deserves thoughtful consideration, not a backroom deal rushed through the Legislature in three short days. This is public policy at its worst.”
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